Pubdate: Sat, 19 Mar 2005 Source: Toronto Star (CN ON) Copyright: 2005 The Toronto Star Contact: http://www.thestar.com/ Details: http://www.mapinc.org/media/456 Author: Georgie Binks Bookmark: http://www.mapinc.org/mjcn.htm (Cannabis - Canada) FORMER GROW HOUSES CAN GO CHEAP But Mould, Wiring Could Be Problems -- Insurance Is Often Difficult To Get Interior designer Linda Makins says when she and her husband first saw their four-bedroom, four-bathroom house in an upscale Mississauga neighborhood, they had no idea it had previously been used as a marijuana grow house. "The house had been on the market for several months, and it was very well-priced but hadn't sold," she said. The only tipoff was that property taxes were higher than for houses in the same price range, making the couple wonder if the house was under-priced and, if so, why. It was only when they decided to put in an offer that they got the answer. Their agent disclosed that the 4,000-square-foot house had been used to grow marijuana -- what is commonly known as a grow op (operation) or grow house. "We immediately got scared and pulled back," Makins recalls. "We called a building inspection company. They told us they had gone through the house and given it a clean bill of health. There was no mould." The owner, who had unknowingly rented it to drug dealers, had redone it before trying to sell it. "He had replaced all of the floors and some of the drywall," Makin says. "From what I understand, the house had been a mess, but you wouldn't know it to walk in now. You could see where they hung the lights in the basement. They had also broken through the foundation of the basement to bypass the electrical panel." Makins purchased the house for what she figures was $30,000 to $50,000 below market value. For people looking for a cheap deal on a house, grow houses may provide the opportunity. David Marshall, a real estate agent with Re/Max Aboutowne in Oakville, has seen it happen. "I've seen a couple (of houses) that would be a good $50,000 under market. It depends on the owner, whether they decide to reinvest in the house, or they just discount it, and say, 'I just want to get rid of it.'" About 300 grow houses were uncovered by Toronto police last year, and many of the addresses are posted on the police website. There is no specific law that requires disclosure of the fact a home has been a grow house, says Bob McLean, director of communications for the Ontario Real Estate Association. However, he says there are several disclosure requirements that realtors adhere to that cover what is important. "The seller and selling realtor must disclose latent defects, and that includes if you know the house has been used as a grow house, you have reason to suspect that there is damage caused by excessive moisture in the house, and damage by fertilizers. The electrical wiring also may have been altered." If you suspect the house you are considering may have been used as a grow house, it's best to call an inspector. "We start in the basement and go up into the roof deck," says Art Robinson, president of Sick Building Solutions Corporation. "One big clue is there is new paint on the cement floor. You often find pot marks; sometimes they have dumped earth on the floor. You look for fertilizer marks, chemical stains. "In a grow house situation, where there has been high humidity, you will find rust all over it and also around window frames. The mould growth is the biggest clue in the basement, and it's something they can't, or don't, remove. It can be toxic or non-toxic." Robinson says sometimes a hole is punched through the floors for venting, and that will go right up to the attic. "That's the worst," he says, "because the roof deck gets covered in mould. Sometimes the roof deck is warped and structurally unsound." As well, grow house operators will punch a hole below the electrical panel to divert electricity away from the meter, and that can be a fire hazard. However, Robinson says all of the problems are fixable. "It depends how much damage has been done. And how much money you want to throw at it." Robinson says one place he cleaned up had been used by a renter as a grow house. "It was a gorgeous house," he says. "The place beside it had been sold for $850,000. This was one listed at $720,000. They go for at least 10 per cent less than market value." Victor Kerman, a real estate agent with Royal Lepage Signature Realty, cautions potential buyers of grow houses about possible difficulties in acquiring insurance. "I had one chap call me a year ago, who bought a house the year before that had been totally renovated," he says. "He insured it then, but a year later, when his insurance came up for renewal, it had been posted on a police website and they wouldn't renew the insurance." Makins says insurance isn't an issue, because damage from such an operation isn't covered, so she is already aware that her house isn't covered if mould becomes a problem. However, she says that while the bank was cautious about lending the money and wanted to see extensive reports about the house, she and her husband were able to obtain a mortgage. Dominique O'Rourke, director of public affairs for Co-Operators insurance, warns buyers need to watch for serious structural issues and mould. "Home policies exclude mould, so if you had a home that was a grow op, that wouldn't be covered -- not a wise investment from a health or coverage perspective." Marshall offers another perspective. "There's no question you can get a great deal on a home like this, but it depends on what you want to do with it," he says. "If you turn around and try to sell it, that is the real gauge of whether you got a good deal." - --- MAP posted-by: Beth